MOLINE, Ill.—U.S. heavy equipment manufacturer Deere & Co. is shoring up its position in the road construction industry with a multibillion-dollar acquisition.
The Illinois-based company said June 1 that it has agreed to buy Germany’s Wirtgen Group in a deal worth approximately 4.6 million euro, or US$5.2 billion. The privately-held business manufactures road construction equipment, employs about 8,000 workers and sells its machinery in 100 countries.
“This transaction enhances our global distribution options in construction equipment and enhances our capabilities in emerging markets,” said Max Guinn, president of Deere’s Worldwide Construction & Forestry Division.
Deere said it plans to fund the purchase using a combination of cash and debt.
And despite the takeover, it said it plans to maintain Wirtgen’s existing brands as well as leave the company’s existing management, manufacturing operations and distribution network in place.
The U.S. company’s board has approved the acquisition, but the deal will need to secure regulatory approval in several jurisdictions before it moves forward. Deere expects it to close early next year.